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Sept Inflation Preview: Set To Tick Higher On Energy Prices

FRANCE DATA

France (20% of EZ HICP) – 0745UK Fri 29 September

Consensus:

  • HICP: 5.9% Y/Y (5.7% prior) / -0.3% M/M (1.1% prior)
  • CPI: 5.1% Y/Y (4.9% prior) / -0.3% M/M (1.0% prior)
  • French electricity prices are not expected to rise as in August (when the price cap was adjusted), but may remain elevated Y/Y. Gas prices are seen as slightly inflationary M/M
  • The September flash PMI showed a slight slowing in output charge inflation to a 2.5-year low. Services were the key driver of inflationary pressure, with manufactured goods prices falling for a fourth successive month. In contrast, input price inflation increased to a four-month high, with services again the driver as manufacturers saw further declines in cost burdens.
  • Very few core inflation expectations out there - Goldman Sachs writes: "we expect core inflation to increase to 4.2%yoy in September, implying a sequential pace of 0.18%mom, broadly in line with August's 0.14%mom."

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